Astro Cycles: The Trader’s Viewpoint by Larry Pesavento $B Al sandvo TRADERS PRESS, INC? INCORPORATED PO BOX 6206 GREENVILLE, SC 29606 Books and Gifts for Investors and TradersAuthor's Note “If you learn something and keep it to yourself—it is worthless." Chinese proverb You have purchased a book which presents an unusual approach to market timing. I would like to propose this most unusua! offer to you. You may call or write me with any questions you may have regarding financial astrology. In return, J request that you not reproduce this book or any portion of it without my permission.THE GREATEST WEAKNESS I can give you the best rules in the world and the best methods for determining the position of a commodity, and then you can lose money on account of the human element, which is your greatest weakness. You will fail to follow rules. You will act on hope or fear instead of facts. You will delay. You will become impatient. You will act too quickly or you will delay too long in acting, thus beating yourself on account of your human weakness, then blaming it on the market. Remember that it is your mistakes that cause losses and not the action of the market or the manipulators. Therefore, strive to follow rules, or keep out of speculation, for you are doomed to failure. If you will only study the weakness of human nature and see what fools these mortals be, you will find it easy to make profits by understanding the weakness of human nature and going against the public and doing opposite of what other people do. In other words, you buy near the bottom on knowledge and sell near the top on knowledge, while other people who just guess do the opposite. Time spent in the study of price, time and past market movements, will give you a rich reward. W.D. Gann in How to Make Profits in CommoditiesTable of Contents Table of Contents ¢ List of Iustrations + List of Tables + List of Figures ¢ List of Charts ¢ Forward + Preface « Acknowledgements + Introduction Section One: Our Solar System .......00065 Astrology and Our Solar System ¢ Planetary Aspects + Interplanetary Synodic Periods ¢ The Zodiac + Signs and Houses + Strength of Houses « Eclipses ¢ Equinoxes and Solstices ¢ Retrograde Motion ¢ Lunar Phenomena ¢ History of Astro-economics + Fibonacci and Planetary Cycles Section Two: The Ephemeris ........cccsssssssssserssersserssessseseee 67 The Ephemeris Explained + Key to the Ephemeris + Ephemeris Examples ¢ Standard Deviation of Aspects Section Three: Planetary Aspects & Synodic Periods............++. 86 Venus-Uranus ¢ Jupiter-Saturn ¢ Venus-Pluto ¢ Mars-Saturn Mars-Jupiter + Venus-Jupiter + Saturn-Uranus:The Major Economic Cycle + Jupiter-Uranus ¢ Mars-Uranus ¢ Wheat (Mercury-Jupiter Saturn) + Combust Section Four: The Stock Market 1987-1989 ......sscccereseeeeeeveee 132 The 1987 Top in the Stock Market 1987 + Dow Jones Industrials--The 1974 Bottom ¢ Venus in 1988 + Other Planets in 1988 + A Replay of the Great CrashTable of Contents (continued) Section Five: Trading with Astro-cycles.........cssscscssseesesseres 136 The Ten Rules of Trading + The Gartley "222" Entry Technique + The 1-3-5 Entry Technique ¢ Astro-Cycle Timing Analysis Sheet {1 51) + Danger Signs Section Six: APPendix.......sccesresesessccssescsecssecesecsesseeseees 154 Astro-cycle dates (The Blue Star program) Section Seven: Bibliography ..... seveveccecavescscacsscceeeveecese 18SList of Illustrations Solar Eclipses and Planetary Positions Phases of the Moon Relative Size of the Planets and Their Orbits Changing Strength by House Relation of Signs and Houses Standard Deviation of Aspects Venus--Uranus opposition Strength of Venus-Uranus aspects S & P 500 Spring of 1988 Venus-Uranus Aspects Standard Astrological Symbols List of Tables The Key to the Entire Interplanetary House Pattern Interplanetary Synodic Periods Venus, Maximum North Declination Moon and Venus Maximum North declination Parallel Celestial Events 1929-33 and 1986-88List of Figures Solar Eclipses and Planetary Positions Phases of the Moon Relative Size of the Planets and Their Orbits Changing Strength by House Relation of Signs and Houses Standard Deviation of Aspects Venus-Uranus Aspects Strength of Venus-Uraaus Aspects S&P 500—Spring 1988 ‘Venus-Uranus Aspects | Standard Astrological SymbolsList of Charts Heliocentric Mercury-Jupiter-Saturn--Wheat May 1988 Heliocentric Mercury-Jupiter-Saturn—Wheat March 1988 Venus-Pluto--Gold February 1988 Mars-Jupiter-S&P 500 weekly Mars-Jupiter--Dow Jones 1986 Heliocentric Mercury-Jupiter-Saturn Pluto-Retrograde—Gold weekly Moon at Maximum Declination-Soybeans November 1982 Heliocentric Mercury-Jupiter-Saturn--Wheat Dec 1978 Combust--Soybeans September 1987 Mercury Retrograde & Solar Eclipse-Soybeans Nov 1976 Mars-Saturn—Cattle 1975 True Node plus Moon Declination Mars Aspects—T. Bonds June 1987 Max. or 0° Lunar Declination—-Dow Jones 1986 Mercury Retrograde--Soybeans July 1987 Apogee or Perigee of the Moon-Gold December 1987 Top of 1987 Stock Market Mars-Uranus—Swiss Franc Weekly ‘Venus-Uranus--S & P 500 Index Weekly ls Apogee & Perigee—July Silver 1987 F Apogee--May Silver 1978 Venus-Uranus (Max Lunar Decl.) Dow Jones 1986 Mars-Saturn--Cattle weekly Venus-Jupiter--March Gold 1983 Mars changing Signs--June T. Bonds 1988List of Charts (continued) Mars changing signs—December Live Cattle 1987 Mars-Uranus—-Deutsche Mark March 1988 Heliocentric Mercury-Jupiter-Saturn—March Wheat 1987 Mercury Retrograde—November Soybeans 1988 North Node of Moon--March 1984 S&P 500 Index Mars Major Aspects--September 1983 T.Bonds Work sheet with Venus—July Soybeans 1988 Full Moon & Moon Node--Comex Gold February 1988 Quarter Moon & True node~T. Bonds March 1988 Jupiter Changing Signs--S&P 500 weekly Mars changing Signs-Cattle June 1987Forward When you finish studying this book you should be able to do the following: 1 2. Know how to use an ephemeris. Identify key planetary aspects & know how to use them. 3. Know where to go for further information. 4. 5. Identify important lunar turning points. Refer to the appendix for key dates. Thave condensed years of personal research in astrology into a few ideas that will help you in timing the stock market and certain commodities. There is no "Holy Grail"-at least I haven't found it--but this will definitely put the probability of success in your favor. I cannot over emphasize the importance of mental conditioning when trading the markets. Trading is 80% mental and 20% technical. You must learn to "master" yourself using a balanced mixture of courage and discipline.Preface The purpose of this book is two-fold. First is to introduce the skeptic to the uncanny harmonic nature of speculative markets. I do not know the mechanism of how or why it works the way that it does. However, I know what to do when I see the phenomenon unfolding. Thomas Edison once said "it was not necessary to understand how electricity worked but just that the lights came on when the switch was turned on.” Second is to alert the market student as to the significant astrological events that are about to occur. The Appendix lists some of the major financial astrological events through 1989. In these few pages you are going to be exposed to the summation of many years of study by three financial astrologers: the author, Larry Pesavento; Ruth Turner; and Jim Twentyman. Between the three of us, we reconstructed thousands of price and time patterns to determine the validity of planetary forecasting. The man-hours and computer time involved with researching and testing these tenets was enormous. Two years of full-time study was only possible because of the spiritual and financial support of Byron Tucker, Jay Krosp, and Jim Twentyman among others. They were, at first, reluctant to see the results made public; but, after lengthy conversations, it became apparent that most people reading this will be too lazy to thoroughly analyze the material, disbelieve what they see, or some combination of the two. Ido not believe in the "Holy Grail" of trading systems. Placing probabilities in your favor is what the intelligentspeculator will try to achieve. Most speculators would prefer that someone else do the research that is necessary to test a market principle or tenet. This book has polarized longtime friends from different parts of the country to share our ideas and cumulative man-hours to test these tenets. A-word of caution should be inserted at this time. A very small segment of the mathematical mystery of the universe is presented in this book. The goal was to select certain phenomena that occur frequently in order for the "trader-speculator" to profit. Upon completion of studying this book, I feel the reader will, at least, have “one of his eyes opened" when something significant is happening in the sky.Acknowledgements Ruth Miller and Jim Twentyman--Editorial comments Laurel Beth Hobbs--Illustrations The Latest Word—Word Processing & Editing Beverly Smith--Typing and Moral Support Byron Tucker--Forcing me to start and finish Llewellyn Publications-Use of their diagrams Commodity Perspective—Use of their charts, Neil Michelsen and ACS Publications--Use of their ephemeris Valliere's Natural Cycles Almanac 1988—Use of their charts Lambert-Gann Publishing—Use of their graphs Matrix Software—For developing "Blue Star" LtCdr. David Williams--for his dedication to Financial Astrology Pam Orth--Proofreading.Introduction One of the recollections of my first stock purchase was its name, Elastic Stop Nut. It was a tip from one of my fraternity brother's father. Tip takers become tip givers and I spread the word faster than Ivan Boesky; the difference was that I knew nothing, inside or outside. As fortune was smiling on me, the stock rose quickly and everyone that bought the stock on my advice was now asking me for another tip. It was the early 1960's and just about any stock you bought went higher. This was a classic example of a famous saying "Don't confuse brains with a bull market." In a mature bull market, investors are sniffing around for undervalued bargains and this was the era of the growth stock. Price earnings ratios of 30 to 1 were common. This process continued through several stocks until the inevitable "Bear market raid" of 1966. Buying on margin is not much fun when prices suddenly drop. I soon realized that investing was more difficult than I had originally anticipated. I was in graduate school at Indiana State University majoring in finance and marketing when I got my first taste of successful investing. One of my professors was a classic chartist and filled his office with graphs, oscillators and stock data. There was a huge weekly chart of silver that fascinated me the first time I went into his office. That chart was about to change my life, and you will see why. Numbers have never scared me. Equations were another story. Seeing this weakness, my professor assigned my MBA. thesis in probability theory. I had to mathematically prepare aformula for beating the Las Vegas dice (crap) game. Knowing that it was impossible in the long run, I concentrated on beating the game in the short run. I developed a modified-Martingale betting system. The odds of the thrower hitting a seven on any throw of the dice were 6 “to” 1. The casinos paid 5 "for" 1, which mathematically is 4 "to" 1. This tacit difference in percentages is one of the reasons why the casinos are so plump and luxurious. I learned this lesson faster than any other. Professional gambling never interested me with the exception of poker, a game of skill that requires both good memory and patience: two notable characteristics of a successful speculator. It was during one of my economics lectures that I heard of "Gresham's Law —- Bad money drives out good money." If the physical value of what the money was made of (i.e. gold or silver) becomes more valuable than its face value, it would be hoarded instead of being used as a medium of exchange. The year was 1965 and silver was freely traded at around $1.20 to $1.40 per ounce. It was illegal for U.S. citizens to own gold except in the form of rare numismatic gold coins. My economics instructor explained to us that the U.S. Treasury had been making dimes, quarters and half-dollars with 90% silver until 1964--A classic example of Gresham's law. He told us that once the price of silver started to rise, the coins that were 90% silver would be hoarded. He mentioned one other fact! The U.S. Treasury had outstanding paper bills that stated on the face "will pay to the bearer on demand in silver." They decided that anyone who wanted silver could present these bills to the Treasury and receive one ounce of i i : t isilver for each one dollar silver certificate. The window of opportunity to make a fast killing was now open! All anyone had to do was collect silver certificates at $1.00 each and wait to redeem them for silver at the mint. Our class studied this phenomenon and came to the conclusion that it was "the goose that laid the golden egg.” Over the next few months we put together a buying pool for silver certificates. We more than doubled our money in less that one year by taking the silver to Handy and Harmon for cash! After graduate school, I moved to California and started a family and continued to follow the markets. It was 1970 and the commodity markets were staying in narrow trading ranges for months. We did not have the “exotic” financial futures that the traders of today can enjoy. Pork Bellies were about as exotic as one could expect. I was concentrating in certain stocks and was not doing too well because the stock market had made a major top. Conti- commodity had been placing ads in the Los Angeles Times telling about the coming shortage in sugar. Roy Fassel was the manager of the L.A. office for Conti. Roy, is the best “pure” technical trader I have ever met. He is consistently profitable. At that time, Roy was very bullish on Wheat and his technical methods thoroughly impressed me. We began buying wheat and the higher it went the more excited I became. We didn't know until much later that the Russians were buying everything in sight that was growing. I was making money every month and my thirst for knowledge about this “easy” money was quenchless.Dave Nelson was a veteran of 40 years in commodities and published an advisory service Marker Research Associates in Pasadena, California. His office was next door to Earl Haddady and Jim Sibbett. Between these three men and Roy Fassel my initiation into the "technicians" society was complete. Dave was WILDLY bullish on Soybeans! It was now late in 1971 and success had spoiled me. My speculative positions were increasing dramatically. To say my confidence level was high would be an understatement. It should be mentioned that the people who were working or trading through Roy Fassel's office were quite special to the commodity business. Ed Horwitz the “premiere” legal expert in commodity law in the country, as well as a genius at campaign trading, used this office. Working and living with Roy was Rick "Bid a Million" Barnes of Barnes & Co. Rick was the broker for Goldman's Egg City. He left for Chicago in 1972 and has since amassed a huge fortune estimated to be hundreds of millions of doilars. Jay Krosp, one of my closest friends and supporters, made several million in Soybeans in 1977--sold out at the top and bought Jimmy Stewart's 11,000 acre ranch in Elko, Nevada. He still owns the ranch! Jim Twentyman knows more about the life and theories of W.D. Gann than anyone-anywhere! Several other people in that office went on to become members of the exchange or write commodity books. It was really a very special environment. I started my entrance into technical analysis with the classic Technical Analysis of Stock Trends by Edwards and McGee.Shortly after finishing this work I bought James Hurst's The Profit Magic of Stock Transaction Timing. He was giving seminars in San Francisco teaching the CycleTech method of trading commodities. There were quite a few famous people who attended this event: Walt Bressert of Hal Commodities, Phylliss Kahn of Gann World, John Hill of Commodity Research Institute among others. I studied his principles of harmonicity, syncronicity, periodicity, and half-span moving averages. It made a great deal of sense to me so I decided to try it in the market. I could not lose! It was now 1972 and all commodity markets were starting up. Inflation was rising, the Arabs raised the price of oil, and Nixon had taken the U.S. off the Gold standard. My system of trading was to use the 12-18 day cycle lows to take advantage of buying opportunities. Unbelievable-- I was making more money in one month than my father would make in a year. I had a new house, several new cars, children’s education fund and expensive clothes and jewelry. Humility did not have a place in my vocabulary. Then came the summer of 1974! The previous year, soybeans had reached $12.90/bushel— sugar at 65 cents--wheat $6.00/bushel. The markets were very volatile and margins had been increased because of the higher prices. This did not concern me because I was long and had plenty of money. The first price break came in early summer of 1974 but prices rallied back quickly. Then an interesting phenomenon happened. The markets would come down and make a 12 to 18 day cycle low and begin to rally. But the rally would only last a few days and